The most frequent reason given by owners of a privately owned company for considering a sale includes a combination of the following:

• Retirement
• Health Reasons
• Partnership Disputes
• Divorce
• Loss of Key Customers or Suppliers
• Other Business Interests

However, starting a sale exercise is not something your business, irrespective of size, should undertake lightly, and every effort should be made to manage the sale process professionally, and to prepare, or ‘groom’ the business so to facilitate a successful outcome.

This guide has been prepared, based on our proven knowledge and practical experience, to guide owners through the complex phases involved in a business sale. While the content within this guide is comprehensive, we have also presented in a user-friendly style. We believe that this guide can play a significant role in helping business owners like you, deal with the critical issues that will come about during the business sale process.

​Should you have any questions after reading this guide we would be more than pleased to discuss these with you. You will find our contact details at the end of the guide and we look forward to hearing from you!
 
Tom Gosche 
Business Strategist
[email protected]
630-675-8971

​Cost of goods sold: The cost of products sold; may also be referred to as cost of merchandise sold or cost of sales.

Goods available for sale: Includes all items that have been transformed from raw materials to finished goods.

Gross profit: (Sales - the cost of merchandise sold)

Gross Profit Percentage: (Gross profit / sales)

Operating income: (Gross profit – operating expenses)

Net Income: (Revenues – expenses)

Selling expenses: Costs directly related to the selling of a product or service. A category in the income sheet under operating expenses before administrative expenses.

Administrative/general expenses: Expenses incurred in the administration or general operations of the business; costs not directly related to selling, such as officer salaries. A category in the income sheet under operating expenses following selling expenses.

Ending Inventory: Cost of good sold = beginning inventory + purchases – ending inventory.

Multiple-step income statement: A form of income statement that contains several sections, subsections, and subtotals.

Single-step income statement: A form of income statement that deducts the total of all expenses in one step from the total of all revenues. The single-step form emphasizes total revenues and total expenses in determining net income. A criticism of the single-step form is that gross profit and operating income are not reported.

Bank reconciliation: Analysis that details the items responsible for the difference between the cash balance reported in the bank statement and the cash balance in the ledger.

• : Coins, currency (paper money), checks, money orders, and money on deposit available for unrestricted withdrawal from banks and other financial institutions. (Anything a bank would accept for deposit).

Accounts receivable: Receivables created by selling stuff on credit. The most common transaction creating a receivable is selling stuff on account (on credit).

Direct write-off method records bad debt expense only when an account is determined to be worthless.

Days’ sales in receivables: Estimate of the average number of days it takes to collect accounts receivable, = average daily sales / average accounts receivable.

Return on sales: Profitability metric computed by dividing net/operating income by sales.

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Core Values & Integrity- Requires that we possess and steadfastly adhere to high moral principles and professional standards.
 
Excellence- Requires us to provide clients (both external and internal) with exceptional service and experience.  This means that our work product is of outstanding quality, meets delivery promises and provides value to our clients. 
 
Career Development/Continuous Improvement - Our professionals dedicate themselves to constantly improving client experiences.  As individuals we continuously learn new skills and improve existing skills and competencies.  As accounting, tax and consulting professionals we are committed and dedicated to our clients, the firm, and ourselves.
 
Work/Life Balance – We respect various work/life requirements of our people and strive to be sensitive and flexible to each individual case.  We work with our full time and part time employees to create a win-win arrangement for them and the firm.  We work to live rather than live to work.
 
Client Service – We are committed to providing timely, reliable responses and to nurture the relationship with our clients.  Our goal is to define, measure, understand, manage and improve client expectations and be able to align them with firm core values, goals and regulatory compliance.